Property tax is the workable wealth tax. There's no such thing as a perfect policy, but in the context of NYC this seems worth trying. I'll be interested to see if it helps create some liquidity in the housing market (the goal), or if it only functions as revenue source.
One wrinkle I haven't heard much discussion of -- cities respond to incentives too. NYC is a global destination for the mega wealthy. If it turns out the uber-rich don't mind paying and this becomes a cash cow for the city, that creates incentives for the city to cater to them and try and get more uber-rich people to have second homes in the city.
> If it turns out the uber-rich don't mind paying and this becomes a cash cow for the city, that creates incentives for the city to cater to them and try and get more uber-rich people to have second homes in the city.
The tax is reasonably small enough that I wouldn't expect a lot of wealthy people from divesting from their properties, but it's probably going to make them think twice about buying new properties.
That second-order effect is the important balancing act for any locality-based wealth tax. If you make the tax too high it starts discouraging the behavior you're taxing, which can paradoxically reduce overall tax revenue.
France discovered this the hard way when they implemented their first wealth tax: Many ultra-wealthy people moved their capital out of France to avoid the tax, which was suspected to have had an overall decreasing effect on tax revenue from that demographic. They replaced the wealth tax with a property tax, which probably played a large role in inspiring this pied-à-terre policy.
"If you make the tax too high it starts discouraging the behavior you're taxing, which can paradoxically reduce overall tax revenue."
I am generally against more taxes, but the structure of this one is quite good in terms of the incentives. If wealthy people who only live in the city part-time stay in hotels instead of buying second homes, the net effect should be to increase the cost of hotel rooms and reduce the cost of owned-housing. NYC charges nearly 10% tax on hotel stays, so recoups some of the cost there. Having property in your city mostly being occupied by people who live their full time, particularly when property is already very expensive, seems like a good thing overall.
> increase the cost of hotel rooms and reduce the cost of owned-housing
Reducing the cost of $5M+ homes will slightly help some wealthy people who live in NYC, and there will be a modest trickle-down effect into less expensive properties. But I thought the goal was to generate tax revenue from the taxes, which wouldn't happen to the extent they end up in the hands of NYC residents.
EDIT: apparently it hits all homes over $1M, which means it will hit more homes but also won't generate revenue to the extent the homes end up being owned by New Yorkers.
"I thought the goal was to generate tax revenue from the taxes, which wouldn't happen to the extent they end up in the hands of NYC residents."
You're right, I'm saying I think it is a good tax for reasons secondary to revenue. We all know NYC is going to squander the money, at least they might make housing slightly cheaper for the average New Yorker in the process.
I'm not sure why if you or I were to expatriate and let go of our US citizenship, we'd still be on the hook for taxes for (iirc) 15 years, but the ultra wealthy can get away with tax havens while remaining citizenship and reaping the benefits of protection by X state.
What prevents the tax following the offshoring attempts? Is it simply that the IRS doesn't have the manpower? or is there a legal loophole for avoiding paying your share that only works for the ultra wealthy?
> we'd still be on the hook for taxes for (iirc) 15 years
This is defintely not true. I did some light Google searches and I cannot anything. There is an exit tax, but only applies if your net worth exceeds 2million USD.
Turns out it's an old law, if you expatriated between 2004 and 2008, and spent 30+ days in the US within 10 years of expatriation.
> Further, expatriated individuals will be subject to U.S. tax on their worldwide income for any of the 10 years following expatriation in which they are present in the U.S. for more than 30 days, or 60 days in the case of individuals working in the U.S. for an unrelated employer.
I thought US citizens are taxed on income (but not capital gains) even when outside the US? I had friends who had to file US income tax returns while living overseas
US citizens regardless of their residency are responsible to pay taxes on all global income and assets. Thus, if you live in the US, but have a brokerage account in Bermuda or Hongkong (where there are no local capital gains taxes) you are still required to pay US federal taxes on capital gains from your overseas brokerage account. The same would be true if you lived in Bermuda or Hongkong.
I think its a good idea in general to tax the second property for any country where housing is a struggle. Its usage based taxation so fair in some sense. Housing is somewhat of a critical asset for a normal safe life. Commercialization of housing properties creates a circular effect on the pricing, thereby increasing the cost of almost everything else.
The goal of this isn't simply to raise revenue, it's also to discourage parking money in empty properties when it's one of the most expensive cities to live in and doesn't have enough housing
I'm also wondering what effect it'll have on all the people that have been declaring their primary residence in Florida for tax purposes yet actually live up here in NYC a good amount of the time. My neighborhood in Brooklyn is filled with cars registered in Florida. If all of a sudden your pied-a-terre condo in Williamsburg is getting hit with $40k+/year in property taxes it might no longer make sense to try and move your residence to Florida to avoid city/state income tax.
studies typically conclude that immigrant populations do contribute to housing demand (duh), but the labor supply they bring to services market (e.g. childcare, retail) lowers the cost of those services by a more-than-commensurate amount. so the total cost of living goes down for "natives."
> They are expensive largely because of housing so your statement is a bit of a tautology.
Yes. And that's impossible to fix.
> Historically NYC housing used to be a lot more affordable before they stopped building, reducing supply relative to demand and thereby raising prices.
Demand will _always_ outstrip supply. And there's no such thing as "affordable housing", it's a contradiction like "hot liquid helium". If housing sells, then it's affordable for _somebody_.
What you're talking about is subsidized housing in some form. Like rent control or housing projects.
> And there's no such thing as "affordable housing", it's a contradiction like "hot liquid helium". If housing sells, then it's affordable for _somebody_.
Incorrect. Housing can be sold to a buyer that won't use it for housing. Like the dog protecting the manger full of food it can't eat, affordable housing can be removed from the market by investors, tax vehicles, and so forth.
"While the tax seems large, experts say the city's antiquated assessment and valuation system dramatically undervalues properties, reducing the burden. City valuations can often be 10% or less of the true market value, they said.
Rather than overhaul the system immediately, the city will gradually update valuations – and the tax – according to the budget documents. Starting in the 2028-2029 tax year, the property values will be based on comparable sales. Since valuations will skyrocket, the tax rates will fall to compensate."
this is, at minimum, a 10% increase in ALL property taxes. And the people most affected will be the lower and middle class.
That literally has nothing to do with the pied-a-terre tax. The assessment process is not related to taxing second homes. Each can be done with or without the other.
You could maybe somehow relate it to supply and demand dynamics, but the idea that that higher taxes can start reducing receipts after a certain point is widely credited to Laffer (although apparently there are signals of others saying similar things throughout the history of economics). The Laffer model displays an inverted U curve.
Classical supply and demand models do not show that increasing the price of x causes quantities to first go up then down after a certain inflection point…
You could probably make the relationship through utility rather or a proxy model (you can model anything with enough imagination in economics) but to call it “the result of” as if it is immediately related is not accurate. It is apparent at first sight when you compare the curves…
If I raise the price of my product, less people will buy it but I'll make more profit per-unit -- so the amount of money I make is an inverted U with price on the x axis and money on the y axis, and I should set the price at the inflection point.
Are there good sources on income tax discouraging working? My rudimentary google searches are mixed, between it being a disincentive, and forcing people to work more for the same income.
>Land value taxes don't discourage desirable behavior
Are you serious? LVTs expressly incentivizes landlords to kick out "grandfathered in" developments and uses in favor of redevelopment and sale for that purpose.
But those grandfathered in developments and uses are exactly what made the place valuable in the first place and you need some amount of them to remain.
Redevelopment often mitigates housing scarcity in general, including for existing residents. They may have to move to a slightly smaller apartment within a generally much improved area, which usually leaves them better off. This is especially true for LVT, which amounts to a decrease in property tax for the improvements to land.
> France discovered this the hard way when they implemented their first wealth tax
Citation needed (for a solid study, not right-wing propaganda from CNews/Libération). From a quick cursory look, it appears the French government had no problem raising taxes when the taxes were higher, and that the previous governments who reduced taxes for the rich setting blame on public debt have in fact increased public debt over and over. (disclaimer: i'm not an economist)
France's government expenditure is 57% of its GDP according to th OECD. It's probably an all-time record in the annals of global economic history in peacetime. It's more than the late Soviet Union spent around 1985-1990 according to the IMF / World Bank.
The 2025 deficit ran at around ~150 billion euros. The Zucman wealth tax would raise 25 billion in the most optimistic projected scenario (so, one sixth of the deficit at most). This is the very best case as projected by its proponents - there's a decent chance receipts would be significantly lower than that.
You're absolutely right that right wing parties did not, and almost certainly will not, solve any of these issues. Neither will a wealth tax. In my opinion, this is only solved in a bang.
I agree a lot of these things end in a bang at some point.
Western rich world boomers have gotten a great deal - unusually stable & high growth economies, relative housing abundance, and peace during their peak working life during which all sorts of retirement related benefits were introduced.
Unfortunately many of those benefits only work in a higher population growth, higher economic growth, lower retired lifespans world that no longer exists.
The fairest and easiest to realize wealth tax is on inheritance. It is great to want to give your kids a headstart in the world, it is terrible for them and the people around them to set them up for life.
It's really not the easiest. You have to prevent gifting things at a lower tax rate while alive. That means it comes bundled with income tax or gift tax implications.
Fairest? I mean, land value tax is fair. So are Pigouvian taxes. In fact they're arguable more than fair. Not having these taxes is arguably unfair. Who deserves ownership of natural resources or to inflict negative externalities on others?
Taking things someone earned through labour and not letting them give it to who they want isn't very fair.
Wow, someone downvoted me? The definition of the word "deserve" is:
> To deserve means to be worthy of, entitled to, or to have a valid claim to a reward, punishment, or treatment based on your actions, qualities, or circumstances
So you genuinely believe that nepo babies, despite not taking actions or creating any circumstances to earn their wealth .... nevertheless deserve to have it anyway?
As a point on terminology: That's not a really a wealth tax on the accumulated assets at-rest own by the (now eternally-resting) owner, but an income tax on the wealth as it moves to the recipients who didn't have it and are getting a massive gift.
It just happens to be a kind of gift/transfer we've decided because of tradition to consider as a special case, where (A) it happens right after a given dies and (B) the giver is frequently but not necessarily related to the recipient.
The problems with inheritance tax is that they can be avoided through trust structures and insurance schemes. In theory it's a good tax, but in practice many wealthy people figured out how not to pay it.
Those schemes are also human-created though, and can be human-fixed. I've never really understood the arguments that go like: "This regulation won't work because the people it targets will avoid it through loopholes and other schemes." Well, get rid of the loopholes and schemes, then!
Granted, this requires lawmakers to explore more of the "exploit space" around their proposed regulations, but I don't think that's really asking a lot of them.
The only way to get rid of tax avoidance is to simply tax transactions, every time, for every person, on every transaction.
“Oh, that’s regressive” they will say.
Make it small per transaction. A rich person spending 100x what a normal person spends will pay 100x as much tax. A billionaire spending 10000x what a normal person spends will pay 10000x as much. And they will also be taxed if they borrow money (that’s a transaction) against assets so they don’t have to sell them.
And when someone inherits, that’s also a transaction. Money moves from one person to another. So that same tax applies.
If your wealth/income increases x1000, their spending will not increase a thousand-fold. It's not like you can eat a thousand burgers in a day. All this leads to is poorer people paying a larger proportion of their income as taxes than the richer.
> And when someone inherits, that’s also a transaction. Money moves from one person to another. So that same tax applies.
This is a big one—we continually decrease the estate tax, which is already waived until you get to 'fuck-you-money' at the federal level (around $11 M)
> It is great to want to give your kids a head start in the world, it is terrible for them and the people around them to set them up for life.
How is it terrible for my kids to not have to break their back like I did to build the wealth I'm looking to pass on to them after I die? Why should they go through the same struggles that I did? It is up to them to squander it or transform it into even more wealth to pass it down to their children and so on. Ideally the former, but sometimes what parents dream for their children does not always come to pass.
Inheritance tax in practice is implemented above a certain threshold.
There is nothing wrong with striving to give a heads up in life to your kids, on the contrary, it's a core, visceral instinct of parents to do so, and removing that would be alienating.
There is a certain level of wealth though, where the "heads up" transforms to an unstoppable compounding lever.
France for instance has a progressive inheritance tax (starting at 5%, up to 45%), triggered for children inheriting at 100k€ per parent. In practice, 50% of the population inherits <70k€.
Also, the proposed Zucman tax in France for instance is triggered starting at 100M€ wealth. At these levels, a mere 2% risk free investment yields 2M€ annual income, this is enough to both compound and enjoy a very luxurious lifestyle. This level of wealth is unstoppably compounding, and that is why it is proposed to tax it.
If you don't, well you end up with a US situation, where disproportionate wealth (and thus power, influence) end up in the hands of random citizens with their own agendas, possibly (likely) orthogonal to the interests of the majority.
Unless i've misunderstood the text, the Zucman tax proposed a minimum 2% tax rate for the >100M€ rich bastards who don't already pay 2% of their income in taxes, not an additional 2% on top of existing taxes.
My grandparents didn't pass away until my folks were in their 60s, my remaining parent most likely won't die until I'm in my 60s.
I also went to give my children the world, but giving them a few million when they're about to retire doesn't really do much.
parents wanting to support their kids should do things like pay for college or a trade school, cover their grandkids daycare costs, help them buy their first home. We charge young parents so much money they don't have, and, much like covid, only seem to cater to old people for whatever reason. I guess because they have the money.
Just curious what you think the correct solution is? You're rich, you have a kid, you die when the kid is 2yrs old. So they get nothing? 12? 22? 32?. Is there some "correct" number? If you're raising them in some $100m home do they get booted out and put in a tenement?
On the other hand, most people die closer to 75-80 and their kids are 50+. Leaving inheritance to them isn't really spoiling them as they are alread adults with established lives.
In the US, the inheritance taxes don't kick in until $15M ($30M for married couples). Even at 2 years old, a child can inherit more money than most people will make in their lifetime before a dime is paid to the IRS.
Estate taxes kick in at much lower threshold in most States. Washington had to repeal their recently created 35% estate tax (for a combined 75% rate) due to overt capital flight to places like Idaho. The exemption in Washington is $3M.
I don't care about estate and inheritance taxes much but many people do and it empirically drives behavior.
I would disagree, I think income taxes and inheritance taxes are morally wrong. Earning money to support oneself and family instead of relying on public largesse should not be taxed. Passing the fruits of a lifetime of work to ones heirs so they can continue do productive work instead of relying on public largesse should not be taxed.
Yes.. spend enough time amongst the inheritocracy and you'll see the wealth is as often as not wasted on them.
There's just too much fun to be had with 0.1% wealth that you didn't have to sacrifice your 20s, 30s (and maybe 40s) to build. Coast at some job with a top 25-50% income and 0.1% inheritance in NYC and live the life.
So if you're spending your inheritance living the high life, that economic activity benefits a lot of other people. Still a net positive in my view.
I get the political power concern, and money = power at a certain point. But I'd rather work on getting money out of politics than putting limits on what people can decide will happen to their assets after they die.
I'm curious how you envision money ever leaving politics. I hear this phrase often and every time I do it feels more and more nonsensical. Politics is what we call the social aspect of resource management (it's often called "political economy" for this reason). The only way I can see to remove money from politics is to create a society that has no money at all. I assume that isn't what you mean?
If we already did that, half of governemnt members across the globe would be in prison. And as much as i would enjoy to see all french politicians rot in jail, i don't think that's happening anytime soon.
Still doesn't seem to be happening as much as it should lately. We have worse things being done by people currently in office. Maybe I should ask, any recent Republican examples?
it just seems that way. there are things that are legal and there are things that are illegal. outside our Lord King DJT, if you break the law and this can be proven in a court of law, you are going to prison.
Right it seems like one of those libertarian perfect-world talking points that ignores the impossibility of implementation.
There's so many indirect ways of influencing politics given lots of money - alternative media, buying out local news, controlling national news.. making entertainment media of your own ideology. Fund interesting groups around particular topics. Give poor Ivy League grads a job and groom them for higher office.. oh wait.
The problem is that theres a lot of stuff in the tax code that allows those at the higher end to also defer taxes indefinitely. So not taxing estates/inheritance, and allowing these deferrals leaves assets untaxed at the high end forever.
For example, step up basis allows inherited assets to have their cost basis re-struck at the value at time of inheritance. So if there is no inheritance tax, the assets transfer to a new owner and a large chunk of value is forever untaxed, even when/if they eventually sell.
Similarly all sorts of interesting stuff that can be done with trusts. Again stuff that's only accessible / worth the hassle to 1%.
In a world with extreme outcomes due to scaling, we might accidentally be re-inventing the hereditary aristocracy if the assets can accumulate outside the tax system.
Yes, the famous bourgeois economist Bastiat is certainly a reference in how to provide economic justice on this planet. /s
To be clear, i'm not exactly defending inheritance tax if resources are shared another way. For instance, it would make sense to let people keep a − modest − home across generations. But i'm tired of rich capitalist tech bros saying income taxes are unfair because they've worked so hard, and inheritance taxes are unfair because they've already been taxed.
Consumption tax is sales/VAT tax excluding some necessities and capital goods. Yes, there are some awkward edge cases: in the UK the exclusions were food and children's clothes, which leads to battles over prepared cold food (e.g. sandwich), takeaway and restaurant dining.
Sin taxes are obviously things society might want to discourage, mainly for health reasons, like alcohol and smoking, but also gambling and externalities, like pollution. Some might stretch that to all carbon emissions to moderate climate change.
Don't tax things you want: working / income and investment / capital gains.
Inheritance tax is doubly wrong because the wealth is already taxed, and death is unavoidable (but emigration is possible, which might help in some countries).
Canada just gives you a fixed amount of cash every year for the sales tax that they estimate that you paid on a regular amount of consumption (HST credit) which solved that problem.
I don't think it's fair that someone who earns $400k and spends $400k is paying roughly the same taxes as someone earning $400k and spending $100k. You should pay more taxes the more luxurious your life is, not the more productive you are.
Where's the other 300k going? If you aren't spending it, what does it matter if it all gets taxed to nothing? And if you end up spending it, then boom there's your consumption that needs to be taxed.
In a world where you are the supreme ruler, then what you individually want matters. In our actual world, it’s more about what the society in general wants.
Property taxes on real property or possibly land value tax (it's a limited resource, at least in places where people want to live, and requires a lot of public infrastructure to support its value there).
Tariffs, various usage taxes and fees.
Need a mechanism to address the regressiveness of some of this but that's an implementation detail.
Their take on inheritance taxes is insane, but I tend to agree that income taxes are immoral. Corporations get taxed on profits: If OkayPhysicist, Inc. spends $200 to make $300, it would be taxed some fraction of $100. Individuals, on the other hand, get taxed on revenue. It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.
Capital gains taxes, on the other hand, are completely moral, and should be much, much higher. Capital investment benefits enormously from the State protecting their property "rights" (you don't need to hire a private army to prevent the workers from just deciding to run your factory for their own benefit, that's what the cops are for), and at a minimum the state would be justified in collecting that dividend for itself. Bootlickers and profession bootlickers (i.e., economists) would complain that a high capital gains tax disincentives investment, but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.
>It doesn't matter if it costs me $4000 in rent, groceries, transportation, etc., to make $6000, I'm getting taxed on that full $6000.
So if I spend $5000 on groceries because I'm eating wagyu steak and lobster everyday, is that a fair "expense" too? You might retort that's obviously a luxury and there should be some baseline that's tax free, but then you're just describing the standard deduction.
>but as long as the value of investment is positive, that is, outpacing inflation, it makes zero sense to let your money languish in a Scrooge McDuck pile rather than get some value out of it.
Businesses don't pay extra tax because they chose to met their needs at a greater-than-minimum cost. If my boss buys some reagents from Dave for $300 bucks instead of Bill's $200 offer, the company's not paying taxes based on a hypothetical $200 cost basis.
If we want to tax "luxury" expenses, we have excise taxes for that.
>Businesses don't pay extra tax because they chose to met their needs at a greater-than-minimum cost. If my boss buys some reagents from Dave for $300 bucks instead of Bill's $200 offer, the company's not paying taxes based on a hypothetical $200 cost basis.
Right, but consumption for a business is fundamentally different than a person consuming. When you eat lobster (vs eating ground beef), any extra benefit goes down the toilet, so to speak. Whereas for a business, it's presumably to further the enterprise. Maybe getting a purer reagent will make the product better and drive more sales. After all, a business itself can't have any needs or wants. In any case a business can't have wants to get the $300 reagent just because, unlike a person. The employees can get benefits, but there are strict policies set by the IRS on what you can count as a business expense, specifically to prevent you from putting lobsters as a business expense.
Moreover such favorable tax treatment isn't restricted to businesses only. It's available to anyone that conducts business. If you're self employed you can deduct the cost of your F-150 truck, if it's used as part of your job.
First one makes sense, second one I’m quizzical about.
Inheritance taxes tend to only kick in at the 8+ digit range.
If anything, taxing that should encourage descendents to do productive work, eh? Since not taxing it, but taxing other things actually discourages it?
I can’t imagine how it would result in anyone relying on public largesse either unless they are really terrible with money. In which case a few extra zeros is unlikely to help any?
I suppose like with many things it's a question of scale. A little is good, more is better, but at some point it may start to have negative consequences.
And I think that inheritance, while a natural desire, is morally wrong. It's an example that desires aren't always congruent with morality. People will go to great lengths to justify their conclusion.
Are gifts morally wrong? If I'm near death is it wrong for to give my assets to my children beforehand, or does it only become immoral if done via a will?
If we're going to talk about morality, I think we need to talk about the government as one of the moral actors.
Imagine this scenario, exaggerated to make a point:
1. Alice receives $X. It's from her boss, for laboring in the mines every day. Government man says: "Give me 20% to pay for the shared roads, or you go to jail."
2. Bob receives $X. It's from his parents, for doing nothing other than being born related to them. Government man says: "Gee, I just can't do anything here, I guess I'll have to shake down Alice even harder next time."
Isn't there something off about the morality of Government Man's choices?
Or look at monarchies and titles of nobility. In the past direct inheritance of political assets was common, and acting on that natural desire, the people involve claimed that parents deserved to direct what they (and their ancestors) had accumulated on to the next generation of their own family.
Yet nowadays most countries and people have decided it is immoral, and they also took steps to make common forms of it extremely illegal.
My point is that economic inheritance today is just as much a social-construct as political inheritance was then. It exists because we permit it to exist, don't be fooled by anyone claiming it's an intrinsic law of the universe or a divine mandate by god that must be obeyed.
I think if we're saying inheritance (at least beyond some point) is morally wrong, then we're really just saying that achieving a certain level of wealth is morally wrong. So deal with that directly, rather than putting your hand in someone's wallet after he dies.
There's a difference in thought here so fundamental that it is hard to argue about details without addressing it first: You believe the individual comes first, what it produces is taxes hy the external construct of the state, which takes from what the individual truly earns.
But the individual would be a subsistence farmer at best without society supporting it, hardly worth taxing. In reality millionaires are only possible with a large state and societal network around them. Wealth is societies gift, and its right to take back.
I would disagree. How else would you pay for the schools, roads and hospitals so that you and your heirs can "do productive work"? I mean i could imagine alternatives, but none that's compatible with a capitalist system.
Is this perhaps some sort of badly-signaled satire, or a comment mis-submitted to the wrong thread?
I cannot understand what though-process led you to suggest repealing "it", whether that means the entire tax or whether it means reducing the number of brackets.
No, I'm saying the tax basically never takes 40% of the estate assets that are being gifted to recipients. That 40% is just one number in a larger equation, and it's wrong to use it out of context in a way that makes the policy seem harsher/scarier than it really is.
However it also true that 99% of the time the estate tax is $0, but that just tells you 99% of Americans die without being that rich. It doesn't mean that piece of the system is not effective or necessary at doing a job. If we had no estate tax, that would create a massive loophole people would abuse so that other taxes stop working as intended.
It's like how the vast majority of cars will not hit the railing that stands between them and a deadly plunge off the edge of the cliff... but we still need to keep it for when it matters.
Walter is just wasting your time because he's a Libertarian who doesn't believe in (m)any tax policies but he doesn't want to outright say that because he knows most people are wise enough to disengage from conversations like this with a Libertarian.
So instead he'll just act like he didn't read that "basically" that you wrote, despite quoting it and then pretend like he doesn't really understand what you just wrote above.
When I was little and playing SimCity 2000 I looked at the tax rates for the city and noticed that the sales tax rate was like 2%, and based on our 14% VAT at the time, it seemed super low to me so I upped it to 12% and was surprised at how unhappy the citizens were.
This gave me the impression that Americans wouldn’t be happy with a significant sales tax, or perhaps this was a city sales tax on an existing state sales tax, which yes, would be outrageous, or maybe Americans get taxed in some other way which makes up for our VAT.
Anyway, I look back and chuckle at my own lack of knowledge at the time.
I would love a VAT tax instead of the never ending stream of taxes we pay on everything else.
Americans are stupid. They see a higher tax on an iPhone they don't need, they will cry about it.
But they pay more at the end of the year on income tax, property tax, car registration, etc., they could care less.
Most Americans don't even look at their pay stub, and are more than happy to overpay their income taxes every paycheck so they get a bigger tax return at the end of the year.
They don't realize that money was theirs to begin with.
They complain about not being able to become wealthy while they give the government an interest free loan, when they could be investing that money and earning on it.
Yup, very "Georgist", which I'm a huge fan of. You can move your money to another country, or hide it entirely in stocks that you borrow against until you die. But, you gotta live somewhere. Land is the only thing the state really has, and it's limited; it's the best thing to tax.
> helps create some liquidity in the housing market (the goal)
Is that the stated goal? I thought the goal was to generate revenue from the tax. It's true that triggering sales will create a one-time boost in sales-related taxes, but that's just temporary.
In San Diego we're voting on a new property tax that only applies to nonprimary residences.
The landed gentry want you to believe that they can't be touched unless you're willing to kick your grandmother to the street, but we can absolutely write taxes that apply more narrowly, and sensible tax policy leads to better outcomes and fewer market distortions than hamfisted regulation.
This also closes some loopholes/arbitrages around declaration of primary residence for purposes of NYC income tax. There are C-suite execs who declare residence in CT/NJ while spending < 180 nights/year in NYC in their huge apartment, allowing them to avoid NYC income tax.
Anyway, NYC real estate taxes are a mess and in some cases regressive.
For example, taxes are based on values set by the city which for the ultra high end, the are understated by an ORDER OF MAGNITUDE..
See:
> Griffin purchased his 24,000-square-foot penthouse at 220 Central Park South in 2019 for $238 million. ..t he city values the apartment at just $15.5 million .. property tax bill for the 2026-2027 tax year is $858,332
.. Griffin’s property tax bill would more than double to $1.87 million .. in the 2028-2029 tax year, it would increase to just under $4 million
I don't feel terribly about someone paying $4M on property probably worth close to $400M at the moment. Normal high income NYers already pay $10-20k/year on properties worth $1.5M by comparison.
Another regressive aspect there was a proposal to change was a purchase tax for cash purchases. Currently one of the closing costs in NYC/NYS is a mortgage recording tax of nearly 2% of mortgage amount. This means if you are rich enough to buy in cash, you can avoid this tax. And if you are a rich cash buyer you are probably buying a higher end property so.. doubly regressive in a sense.
Who benefits most of a city being improved by tax dollar spending? Property owners. They benefit in the range of hundreds of thousands of dollars to millions of dollars each. Thus it makes sense they contribute the most tax dollars.
Or show me a worker who benefits the same amount of money from the city being improved.
It depends on how the $ is spent. If it's spent on "free preschool" then it benefits parents who use the free preschool. These are by definition not the people paying this non-resident-only tax.
> I'll be interested to see if it helps create some liquidity in the housing market
lol. why would it? if you tax something, you get less of it.
there is not even close to any kind of shortage of demand for housing in NYC. there is an enormous shortage of supply; it is in fact _illegal_ in most places to build more supply.
The tax is only on non-primary residences - one person owning multiple homes. I don't expect it to have a significant effect on housing supply, but I think it logically could.
many of these second homes are currently on the rental market. if there is less supply of these coming into the rental market, rent prices rise.
I don't know why everybody's brains are so broken when it comes to housing policy.
let's say you own an uninhabitable 2 family home in Brooklyn that was built in 1910 but would require serious renovation to be able to rent it out (not at all a strawman; this is incredibly common). now imagine your incentives as the property owner:
* without the pied-a-terre tax: some risk & upfront cost to renovate, but future cash flows from rental income make this incentivized
* with the tax: same risk & upfront cost, but now the future cash flows are decreased by the amount of the tax (since the assessed value will have increased)
anywhere that difference tips the scales from "renovating" to "not renovating," there is one fewer home on the market.
What do you mean? It's not a tax on commercial property.
One effect might be that wealthy non-residents prefer to stay in a hotel when they visit New York? The amount of money being collected as property tax would pay for a very fancy suite.
You sound like you feel the need to criticize this tax because you want to reflexively attack any idea whereby the rich have to pay their fair share of anything, and thus have strung together a bunch of tokens that seem relevant to you, but actually don't constitute a logical response at all to the issue being discussed.
I think this is sarcasm, but in case it's not isn't this the opposite of trickle down? Trickle down means lower taxes for the wealthy so they'll then have access to those extra funds to create jobs (through direct and indirect actions (investing in their companies, buying more stuff, etc.)). This is actually taking money away from the wealthy.
If this works (meaning NYC gets the revenue without kneecapping those extra property taxes in the long run because the wealthy bail on their second homes, which would drive down prices and therefore property taxes), it would be an anti-trickle-down win.
I'd slightly adjust what you're saying because I think in this NYC case, and oftentimes generally-speaking, those funds are not reserved solely for what would conventionally be considered social programs.
Only adding this because I think it's important to point out that tax increases that solely target the rich are not always a transfer of wealth from rich(er) to poor(er), but sometimes fund things that those rich taxpayers also benefit from (in the NYC case those funds could easily be paying part of the police, parks, sanitation, etc. budget).
Push up asset prices mainly - so locking poorer people out of (e.g.) home ownership.
Money is not a tangible thing, you can't eat or drink it. Instead it is a signalling protocol for resource allocation. If the very wealthy have many empty homes, when many people are homeless or inadequately housed, then that signalling protocol has failed (from a social justice point of view), and 'trickle down' is not working.
To what degree do they really invest it? A lot of rich people just buy shares (other than at an IPO) and just move money around each other's pockets rather than investing in something wealth creating, or just swap already-existing overpriced properties around each other.
> move money around each other's pockets rather than investing in something wealth creating
So your claim is that wealthy people aren't interested in generating more wealth for themselves? What exactly is it you are claiming? Sounds like something a populist youtuber would say.
That requires explanation of a mechanism that would generate wealth for yourself (and your selected friends) and no one else. Capturing 100% of the value is all but impossible.
Also you didn't address what he said, possibly because it's complete nonsense?
> A lot of rich people just buy shares (other than at an IPO) and just move money around each other's pockets rather than investing in something wealth creating, or just swap already-existing overpriced properties around each other.
That requires explanation of a mechanism that would generate wealth for yourself
Acquire it from other people. That's how I do it; my day job pays me less money than me just swapping stocks around. The companies whose stock I buy and sell have never seen a penny from me; never received from me a single penny of investment in their business. I harvest wealth without having ever invested in any company and my actions create no new wealth; I harvest wealth I did not create.
> That requires explanation of a mechanism that would generate wealth for yourself (and your selected friends) and no one else
I mean, there are a bunch of direct mechanisms for that, from the legal (preferred stock classes), through the grey (letting your buddies invest pre-IPO), to the less-legal (insider trading)
Sitting on a bunch of real estate in a desirable location like NYC isn't a bad mechanism either.
But that's only because there are other people who will happily move money into your control to get that share from you. Doesn't change the fact that the money you spent acquiring it has moved out of your control onward in the economy.
The share is under your control, the money isn't. Being able to convert it at will doesn't change that. Also how much if anything it's worth when you go to convert it isn't under your control either.
And that doesn't change the fact that Jeff Bezos, fundamentally, is extremely wealthy, even if he'd have to sell or borrow against a few shares to use it.
It kind of was the subject. The person I replied to up thread was clearly implying that rich people making investments is a net benefit to everyone, and if they were all acting like VCs, maybe, but since they are mostly locking up their investments in mutual funds or real estate, its less clearly beneficial.
Yes, a lot of economic activity is predicated on the availability of investment capital, but only investing in already-successful firms doesn't generate new economic activity. And static, unused real estate generates basically none at all.
It's a label for a very real tax policy and the advertised reason behind it, it's definitely a thing (or was, at least, the argument is less common today)
It is a label, but it has always been used by those expressing opposition to a policy that they label "trickle down". It has never been used by proponents of a policy to describe or advocate for their own policy.
The original comment, and many other comments spread across the Internet including yours, are written as if the elites themselves are the ones "advertising" the label of "trickle down economics" as if it's some kind of economic theory they are advocating for. But it's always been a label used by opponents, particularly Democrats to derogate Reagan era policies.
No, a tax will always reduce demand \saying otherwise basically ignores decades of established economics.
> that creates incentives for the city to cater to them
What does that even mean? If catering to the wealthy was profitable, everyone would do it. Just look at Dubai, it's built entirely around that model, and it's a brutally competitive space. NYC attracts the mega-wealthy for a different reason: network effects. Meta-wealthy come to be around other mega-wealthy people.
What I said is this is what I struggle with. In general I think too much regulation is what caused this problem. And the question on my mind is, from where we are today, is there a liberalization of the rules that would also help maintain a mixed income neighborhood, rather than the current trajectory (quickly becoming an uber-wealthy country club).
Traveling cross-country at age 10 and 6. Amazing that all they needed was a letter saying they weren't runaways, and people seemed to think this was a neat adventure for them.
The thing about status pages is they have to be up when you're down, and (if your service is non trivial) they have to be able to handle a traffic profile that basically looks like DDOS. So, you're paying for the hosting infra more than the software.
Nah even the trivial part is too much for most businesses to do themselves.
Most companies aren’t going to opt for a bespoke solution to things if something tried and true already exists. Maybe the really small simple applications will be affected, but the ones with hundreds of features and years of experience will be fine.
> This is fundamentally the argument against all "SaaS is dead due to AI" claims.
True, All as in everything. I think Anthropic is extremely silly for thinking that and maybe even a bit delusional.
But to take the devil sides here, maybe some might be a better accurate term as to be honest, Status pages are a mission critical. Imagine this page landed 404 and the panic then vs now. Also I can be wrong, I usually am but status page innovation is more devops oriented than software itself. Basically how do you keep the status page website as having the best status time of itself (imagine it goes down) and its needed 24x7 as outage can happen anytime.
I do feel like status pages are more the exception than the norm in how mission critical they can be, again I can be wrong. Also you can self host status page easily yourself if you wish (UptimeKuma is awesome!) on a 7$/yr vps and there are so many free options available out there and its very much a competitive space to be in and basically no lock-in for the most part.
>This is fundamentally the argument against all "SaaS is dead due to AI" claims.
The steelman version of "SaaS is dead due to AI" isn't that SaaS companies will disappear, it's that competition will greatly intensify, to the extent that it becomes a commodity business with thin margins, rather than the money printer it is today.
Yeh, I've tackled this problem a few times, and just like back-ups you at some point need something external, because if you're down, you don't want your status page to go down too. This means you need to make sure to sandbox it pretty hard if rolling your own, ideally on a separate cloud behind a different CDN etc...
I think a better solution would be to repeal section 230 protection for any kind of personalized or algorithmic feed. The algorithm makes you a publisher, and you should be liable for what you publish.
That would make it very hard, nigh impossible, for a platform like YouTube or TikTok to exist as it does today, and would instead favor people self-curating mechanisms like RSS readers etc.
>and would instead favor people self-curating mechanisms like RSS readers etc.
That isn't what would happen.
What would happen is that only the platforms which can afford legal teams - in other words, the big platforms - would host user posted content under strict arbitration only terms, and every other platform (including Hacker News, which uses an algorithmic feed) would simply not. Removing one of the cornerstones of free speech on the web in favor of regulation will only centralize the web more.
And you wouldn't see mass adoption of "self curating mechanisms" because most people aren't like Hacker News people and would find the premise of having to manually curate data feeds from every they visit to be a tedious waste of their time.
I also think that platforms like Youtube and Tiktok shouldn't be illegal. I don't even think that personalized algorithms should be illegal - it's surprising that one has to point this out on a forum of programmers - but algorithms have no inherent moral dimension and the ability to use an algorithm to find and classify relevant content can be useful. The same algorithm that surfaces extremist content surfaces non-extremist content. The algorithm isn't the problem, rather the content and the policies of these platforms are the problem. And I don't think the solution to either is de facto making math illegal and free speech more difficult.
How is RSS self curating? It's just a way to get a feed from somewhere. And under the maximally external-locus-of-control culture this jury is using, those feeds would themselves be deemed evilly addictive.
There is no solution for this kind of verdict beyond appeal, or changes to the law to rule such suits out, because it's not rooted in any logical or legal principle beyond the idea that people should not be responsible for their own actions (or their children's actions). But there's no limiting factor to that belief. You can't fix it with RSS or federation or making people select who they follow or chronological feeds. Those would just get blamed for "addiction" instead.
Each blog you follow in the RSS model you opted in to. And each post comes from a person, or a publication, who can be held accountable for what they publish.
Ordinary media, like newspapers, books, radio, and TV, have worked this way forever — people publish “channels” and you decide what channels to follow. A channel can be held accountable.
The algorithm model is different. People just publish “content” into the platform, and the platform makes a custom channel for each viewer, inserting content from people you’ve never heard of and didn’t ask to follow. And it optimizes that custom channel for whatever addicts you the most. That’s fundamentally a different beast than opt-in media consumption.
And if that blog is a newspaper or other aggregator? What makes the RSS feed of the CNN front page fine, but not the RSS feed of the YouTube front page?
There's really no difference. Media companies all aggressively optimize for engagement, often to the point of A/B testing headlines.
There’s a huge difference. Everyone sees the same front page on CNN, or HN for that matter. Nobody sees the same page twice on YouTube or TikTok. That’s a fundamental distinction between human curated media (even with A/B testing), versus machine curated media.
People don't all see the same front page on CNN or HN. I just said, media companies all do things like A/B test headlines, they show different content to people based on geolocation, they change what ads people see and they select stories based on what they know will maximize engagement with their specific audiences. The fact that it's partly done by a human editor backed up by dashboards doesn't change what they're doing.
HN also shows different pages to different people. The set of headlines and their ranking is constantly changing, and user settings change whether you see dead/flagged articles or not.
The idea there's some fundamental difference here is people working backwards from the wealth of the operators to some conclusion they'd like to be true, usually one that lets them blame other people for their own decisions. But there's no validity to this.
I think it's fair to say that, if not for Heroku, I would not have had a career in software. I learned how to code web apps from books, and had a breakthrough when I discovered Rails (in 2009 I think?). But for the life of me I did not understand how to deploy a Rails app.
I bashed my head against that wall for a while, then found Heroku, and it just worked. That let me ship a product when I barely knew what I was doing, which let me keep building and learning, until eventually I didn't need Heroku anymore. But I still always liked it, because I never enjoyed thinking about infrastructure.
One wrinkle I haven't heard much discussion of -- cities respond to incentives too. NYC is a global destination for the mega wealthy. If it turns out the uber-rich don't mind paying and this becomes a cash cow for the city, that creates incentives for the city to cater to them and try and get more uber-rich people to have second homes in the city.
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